LONDON, Nov 10 (Reuters) - Investors poured a record $1.3
billion into funds managing tech shares over the past week,
contrasting with a picture of ebbing inflow into world equity
vehicles and losses on U.S. stock funds, Bank of America Merrill
Lynch (BAML) said on Friday.
The data, which tracks flows through Wednesday, also showed
some alarm over junk debt, with some $600 million in outflows
from high-yield bond funds, an eight-week high.
World stocks are witnessing their second day of losses,
albeit after the longest daily winning streak in almost 11
years. A 0.4 percent pullback in U.S. tech shares on Thursday
came after a 40 percent jump in 2017 alone.
"The recent pullback is a 'dress rehearsal' not the Big
One," BAML told clients, noting the fall had been preceded by
"insane gains" which had pushed for instance the value of U.S.
tech firms and their U.S.-listed Chinese peers past the entire
market capitalisation of Germany's DAX index.
U.S. as well as European junk bond yields have hit record
lows in recent months, with the latter having fallen below U.S.
Treasuries, the bank noted.
A meltdown would "require recession risk or moves higher in
wage inflation, bond yields and volatility or credit spreads."
Equity funds received a net $3.9 billion, slowing from the
previous week's $5 billion, though mutual funds witnessed $1
billion in outflow.
U.S. equities suffered outflows of $5.6 billion while
European funds took in $2.9 billion, having enjoyed gains in
nine of the past 10 weeks.
Bonds took in $6.5 billion, with the 46th straight week of
flow to investment-grade funds and $500 million going to
emerging debt funds, the latter slowing from recent weeks.
(Reporting by Sujata Rao; Editing by Peter Graff)
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